Thailand’s Bond Market Association, the TBMA, wants to use blockchain technology to speed up and ease the clearing and settlement of corporate bond transactions with the ultimate goal of creating a ‘Bond Coin’, as reported by the Bangkok Post.
Thailand’s Securities and Exchange Commission has already given the system the green light in principle. TBMA’s president Tada Phutthitada has indicated that it will be rolled out in three stages, with the first expected to be in operation next month – the development of a bond registrar platform for the purposes of bond trading.
Once complete the blockchain-enabled system is expected to provide the following services: bond settlement information system, bond subscription system, and a verification system for bond transactions, according to Phutthitada.
Developed using a private blockchain and smart contract platform, it will also offer information for investors such as interest rates and payment schedules, realtime checking of listed bond holders, investment amounts, and other useful information to investors.
After the initial phase of the bond registrar platform is complete, the project will then enter its second phase, expected to take about nine months, which will see additional features that will enable bond deposits and culminating in the ‘Bond Coin’ clearing system, the final phase which is expected to take 12 months.
Once complete, the clearing and settlement process is expected to happen immediately – a massive improvement over the current two days – and will cut out the middlemen (Thailand Securities Depository and bond traders) as they will become irrelevant to the process’ functioning.
According to TBMA’s vice president Chaitat Prachuabdee, the new blockchain-based system will speed up total transaction time to just 1 to 3 days instead of the current 7 to 10 days while also improving transparency.
This improved transaction time and transparency is something people in the blockchain world are increasingly demanding. To serve that need several in the space have been developing technology where anyone can use smart contracts to obtain peer-to-peer loans or even issue their own bond.